Thailand Proposes Amendments to the Social Security Act: Expanding Coverage and Enhancing Benefits for Insured Persons

Introduction

On 3 November 2026, the Cabinet approved the draft Social Security Act (No. ..) B.E. …. (the “Draft Bill”), as proposed by the Ministry of Labor and revised from the version previously reviewed by the Office of the Council of State. The Draft Bill seeks to amend the Social Security Act B.E. 2533 (1990) (the “Social Security Act”) in order to modernize Thailand’s social security framework in response to current economic and demographic conditions, particularly the country’s ageing population.

The Draft Bill proposes amendments in the following key areas.

1. Governance and Administration of the Social Security Fund

• Social Security Committee: Empowers the Committee to issue regulations governing the write-off of bad debts, and introduces an additional disqualification that prevents members appointed by the Minister from simultaneously serving on the Workmen’s Compensation Fund Committee.
• Medical Committee: Extends the qualifications and disqualifications applicable to the Social Security Committee to members of the Medical Committee.
• Term of Office: Changes the term of the Social Security Committee, its advisers and the Medical Committee from two years (with the possibility of reappointment for up to two consecutive terms) to a single term of three years.
• Audit Committee: Clarifies its composition, qualifications and responsibilities, including the preparation of an audit charter and the review of internal controls, risk management and good governance.
• Appeal Committee: Revises the relevant provisions to provide greater clarity.

2. Social Security Fund Revenue

The Draft Bill revises the sources of revenue of the Social Security Fund to accommodate the introduction of Section 39/1 and the revised provisions on excess contributions and unclaimed benefits. The proposed sources include:

• Contributions from the Government, employers and insured persons under Sections 39/1, 40 and 46; and
• Excess contributions, surplus proceeds from the seizure, attachment or auction of assets, outstanding payments due to insured persons, and unclaimed benefits for which no refund has been requested.

3. Insured Persons under Section 33

• Maximum Age: Raises the upper age limit for compulsory insurance of employees from 60 to 65 years, or to such other age as may be prescribed by Royal Decree.
• Wage Base: Requires the minimum and maximum wage bases used to calculate contributions to be reviewed at least once every five years.
• Child Allowance: Allows eligible insured persons to continue receiving child allowance for six months after their employment ends. This period may be extended by Royal Decree, but may not exceed 12 months.

4. Continued Insurance under Section 39

• Increases the minimum contribution period required for former Section 33 insured persons to apply for continued insurance from 12 to 24 months.
• Requires eligible persons to notify the Social Security Office (the “SSO”) within six months from the date their Section 33 insured status ends.
• Imposes a surcharge of 2% per month on unpaid or underpaid contributions, capped at the amount of contributions payable.

5. New Section 39/1: Continued Coverage for Old-Age Pension Recipients

The Draft Bill introduces Section 39/1, which allows certain persons who have ceased to be insured under Section 33 or Section 39 and are entitled to an old-age pension to continue their social security coverage.

• Eligibility and Notification: Eligible persons may elect to continue coverage by notifying the SSO within six months from the date their insured status ends, while retaining their old-age pension entitlement.
• Contributions: The Government will contribute one part for every two parts contributed by the insured person, at the rates prescribed by Ministerial Regulation.
• Coverage: Continued coverage will provide benefits in respect of sickness or injury, disability and death. These rights will be non-transferable and not subject to execution.

6. Contribution Payments and Refunds

The Draft Bill clarifies employers’ obligations regarding contribution payments and revises the procedures for recovering excess contributions and surplus proceeds, as follows:

• Contribution Payments: Employers must deduct the insured person’s share of contributions from wages and submit both the employer’s and the insured person’s contributions, together with the prescribed form, to the SSO by the 15th day of the following month.
• Failure to Pay Contributions: Where an employer fails to submit contributions or submits an insufficient amount, an officer may issue a written notice requiring payment of the outstanding contributions and surcharge within a period of not less than 30 days from receipt of the notice.
• Excess Contributions under Section 33: Employers may offset excess contributions against contributions payable in the following period. Alternatively, employers, insured persons or other entitled persons may request a refund within one year from notification by the SSO.
• Excess Contributions under Sections 39 and 39/1: Insured persons may offset excess contributions against subsequent contributions or request a refund within one year from notification by the SSO.
• Surplus Auction Proceeds: Any surplus remaining after deduction of enforcement expenses, outstanding contributions and surcharges must be returned to the employer or other entitled person. The SSO must notify the entitled person to claim the amount within one year.
• Unclaimed Amounts: If an amount remains unclaimed three years after notification, the SSO must deposit it into a designated account. If it remains unclaimed after ten years, it will be transferred to the Social Security Fund as Fund revenue. The entitled person may subsequently claim the amount, together with the interest earned on the bank deposit.

7. Maternity and Disability Benefits

• Maternity Benefits: Extends the benefit period from 90 to 98 days, at 50% of wages, for up to two occasions. A different entitlement period may be prescribed by Ministerial Regulation.
• Disability Benefits: Increases the monthly income replacement benefit for non-work-related disability from a maximum of 50% to a maximum of 70% of wages.

8. Old-Age Benefits

The Draft Bill introduces greater flexibility in the payment and calculation of old-age benefits, including the following:

• Calculation of Benefits: Wages previously used as the basis for calculating old-age contributions will be adjusted to their present value when calculating benefits.
• Pension or Lump-Sum Gratuity: Insured persons with at least 180 months of contributions may choose between a monthly old-age pension and a lump-sum old-age gratuity upon reaching the age of 55 or upon termination of insured status, subject to the prescribed conditions.
• Payment Following Unemployment Benefits: Where an insured person remains entitled to unemployment benefits, payment of old-age benefits will commence only after the unemployment benefit entitlement ends.
• Advance Pension: Eligible pension recipients may apply for an advance payment of up to 60 times their monthly pension, subject to the criteria, procedures and discount prescribed by Ministerial Regulation.
• Partial Withdrawal: An insured person, or a former insured person with at least 60 months of old-age contributions, may withdraw part of their contributions before reaching the age of 55 or before their insured status ends, in the event of a serious disaster affecting their livelihood.
• Use as Loan Collateral: An insured person, or a former insured person with at least 60 months of old-age contributions, may use part of their old-age contributions as collateral for a loan from a financial institution that has entered into an agreement with the SSO.
• Withdrawal and Collateral Limits: The amount available for partial withdrawal or use as loan collateral is limited to 30% of the person’s old-age contributions and may not exceed twice the maximum wage base applicable to that person.
• Repayment and Restoration of Entitlement: Full old-age benefit entitlement may be restored upon repayment of the amount received, together with the Fund’s investment opportunity cost.
• Death Before Receiving Old-Age Benefits: The SSO may deduct the relevant outstanding amount from the benefits payable to a person who dies before receiving old-age benefits. Any remaining balance will be payable to the person’s heirs.

9. Unemployment Benefits

The Draft Bill clarifies the eligibility requirements for unemployment benefits. To qualify, an insured person must:

• Be aged 60 or below;
• Have made contributions for at least six months within the 15 months preceding unemployment; and
• Not be receiving old-age benefits at the time of claiming unemployment benefits.

10. Penalties

The Draft Bill revises certain penalties under the Social Security Act by replacing criminal penalties with regulatory fines under the Act on Imposition of Pinai Regulatory Fines, B.E. 2565 (2022), as follows:

• Survey Forms: Intentionally failing to complete or return a survey form, or providing incomplete information, will be subject to a regulatory fine of up to THB 5,000.
• Employer Reporting Requirements: Employers who fail to submit employee registration forms within 30 days from the date an employee becomes insured, fail to notify the SSO of changes to relevant information by the 15th day of the following month, or fail to submit contribution forms by the statutory deadline will be subject to a regulatory fine of up to THB 20,000, plus an additional daily fine of up to THB 5,000.
• False Information: Criminal penalties will continue to apply to employers who knowingly submit false information concerning insured persons, wages or other required particulars, or who submit false contribution statements. These offences remain punishable by imprisonment for up to six months, a fine of up to THB 20,000, or both.

11. Transitional Provisions

The Draft Bill includes transitional provisions to ensure continuity following its entry into force:

• Home Workers Protection Committee: Existing members will remain in office until the employer and insured-person representatives are appointed in accordance with the amended Section 8(3).
• Continued Insurance under Section 39: Former Section 33 insured persons who have contributed for at least 12 months, and whose insured status ended due to termination of employment, may continue insurance under Section 39 on the basis of the previous eligibility requirements, provided that they notify the SSO within six months from the date their insured status ends.

Current Legislative Status

Following the Cabinet’s approval on 3 November 2026, the Draft Bill will be submitted to the House of Representatives Coordination Committee before proceeding to the House of Representatives for consideration. Cabinet’s approval does not bring the proposed amendments into effect. The existing Social Security Act will remain in force until the Draft Bill completes the legislative process and the amendment is promulgated and enters into force.

The Cabinet also acknowledged the Ministry of Labor’s plan to prepare 18 subordinate legal instruments, comprising one Royal Decree, eight Ministerial Regulations, six regulations and three notifications. These instruments are expected to be prepared within 60 days from the date the Draft Bill enters into force.

Key Takeaways

• On 3 November 2026, the Cabinet approved the Draft Bill, which proposes amendments to Thailand’s existing social security framework.
• The proposed amendments revise the governance and administration of the Social Security Fund, including the powers, qualifications and terms of office of its committees, as well as the sources of Fund revenue.
• The Draft Bill expands and revises coverage for insured persons under Sections 33 and 39, and introduces continued coverage for eligible old-age pension recipients under the new Section 39/1.
• The Draft Bill revises contribution payment and refund procedures, enhances maternity, disability and old-age benefits, and clarifies the eligibility requirements for unemployment benefits.
• Certain offences will be subject to regulatory fines instead of criminal penalties, while criminal liability will remain for the submission of false information. The Draft Bill also includes transitional provisions.
• The Draft Bill remains subject to the legislative process and has not yet become law. The existing Social Security Act will remain in force until the Draft Bill enters into force.

Author: Panisa Suwanmatajarn, Managing Partner.

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Employment: Supreme Court Judgment No. 9052/2559 Reinforces Protections for Older Workers in Thailand’s Private Sector

1. Background about retirement age in the private sector:

In Thailand’s private sector, no universal mandatory retirement age is fixed by statute for all employers. Retirement is primarily governed by employment agreements, internal work regulations, or company policies. Prior to the Labour Protection Act (No. 6) B.E. 2560 (2017), which introduced Section 118/1, the legal framework was less explicit. This amendment clarified that retirement—whether pursuant to agreement or employer policy—constitutes termination of employment, thereby entitling the employee to statutory severance pay under Section 118.

In the absence of a stipulated retirement age in contracts or policies, or where the stipulated age exceeds 60 years, an employee aged 60 or above may elect to retire upon 30 days’ notice, with severance payable. In practice, many private sector organizations set retirement ages between 55 and 60 years. However, the application of such policies must adhere to principles of fairness, consistency, and non-discrimination, particularly as Thailand addresses the challenges of an aging society.

2. Compulsory compensation? What does the labor law say?

Under Section 118 of the Labour Protection Act, termination of employment—including retirement initiated by employer policy—requires the employer to pay severance compensation based on the employee’s length of service. The prescribed minimum rates include:

•  1 year but less than 3 years: not less than 90 days’ wages;

•  3 years but less than 6 years: not less than 180 days’ wages;

•  10 years or more: not less than 300 days’ wages (with potential enhancements for longer service).

Retirement is explicitly treated as employer-initiated termination when enforced through policy or agreement, triggering these obligations. Employers cannot circumvent severance by characterizing retirement as voluntary resignation. Furthermore, the arbitrary or discriminatory application of retirement policies may expose employers to claims of unfair dismissal.

3. Ruling – Analysis of Supreme Court Judgment No. 9052/2559:

Supreme Court Judgment No. 9052/2559 stands as a landmark decision in Thai labour jurisprudence concerning unfair termination and age-related employment practices. The case involved a head editor of a Chinese-language newspaper who commenced employment at age 55 and served for approximately 22 years until his termination at age 77. The employer introduced a new retirement policy aimed at organizational restructuring and recruiting younger staff, offering statutory severance equivalent to 300 days’ wages.

The Central Labour Court initially upheld the termination as a legitimate exercise of managerial authority for business improvement, noting the provision of full severance and absence of personal malice. The Supreme Court reversed this decision, ruling the termination an unfair dismissal. The Court adopted a substantive justice approach, scrutinizing the specific circumstances rather than accepting the policy at face value.

Key elements of the Supreme Court’s reasoning were:

•  Nature of the Work: The position required specialized linguistic, editorial, and academic expertise in Chinese-language publishing. Such roles typically benefit from accumulated knowledge and experience, which increase with age, rather than physical capabilities that may decline.

•  Employee’s Performance Record: The plaintiff maintained exemplary performance with perfect attendance and no health-related issues. Notably, the employer had recently promoted him and increased his salary, actions inconsistent with claims of diminished capability.

•  Validity of the Retirement Policy: The newly introduced policy lacked clear, objective, equitable, and pre-announced criteria. It was viewed as an ad hoc measure rather than a transparent, consistently applied rule, rendering it an insufficient justification for termination, especially when motivated primarily by age.

The Supreme Court remanded the case for determination of damages, including interest at 7.5% per annum. The judgment emphasizes that while employers retain managerial prerogative, age-based retirement decisions must be supported by objective, job-related justifications and cannot serve as a pretext for the arbitrary replacement of experienced personnel. Although issued prior to the 2017 amendments, the ruling remains highly relevant and continues to guide the application of fairness standards in retirement and termination cases.

Key Takeaway:

Supreme Court Judgment No. 9052/2559, together with the statutory framework under the Labour Protection Act, underscores that chronological age alone does not justify termination in Thailand’s private sector. Courts will prioritize individual capability, performance evidence, and substantive fairness, particularly in knowledge-intensive roles. Employers are advised to maintain transparent, consistently applied, and objectively justified retirement policies supported by legitimate business needs. This jurisprudence strengthens protections for capable older workers while encouraging responsible workforce management practices in Thailand’s aging society.

Author: Panisa Suwanmatajarn, Managing Partner.

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Employment vs Liberal Profession

Thai Tax Treatment of Physicians under Sections 40 (1) and 40 (6) of the Thailand Revenue Code

Background

As Thailand’s healthcare sector continues to evolve, the engagement structure between physicians and private hospitals has become increasingly diverse. Traditional employment relationships are often replaced or supplemented by hybrid arrangements, including revenue-sharing models and per-case compensation structures.

Against this backdrop, a recurring tax issue arises – Should a physician’s income be classified as employment income under Section 40 (1), or as income from a liberal profession under Section 40 (6) of the Revenue Code?

The distinction is critical, as it directly affects the availability of deductions and the overall tax burden.

Legal Framework

The Thailand Revenue Code distinguishes between:

• Section 40 (1): income derived from employment, including salaries, wages and similar benefits; and
• Section 40 (6): income derived from liberal professions, namely arts of healing, expressly including the medical profession.

While the statutory wording appears clear, its application in practice is highly fact-specific and has been shaped by both judicial interpretation and tax rulings issued by the Revenue Department in response to tax inquiries under applicable law.

Judicial Approach : substance over form

Thai Supreme Court (Tax Division) jurisprudence has consistently adopted a substance-over-form approach in determining the nature of a physician’s income.

In Supreme Court Judgment No. 1802/2533, the Court considered a physician engaged by a private hospital under a service-based remuneration model. The physician exercised discretion in treating patients and was compensated based on services rendered.

The Court held that such income could fall within Section 40 (6), emphasizing that:

•   the exercise of liberal profession judgment is central to medical practice; and

•   the use of hospital facilities does not, in itself, create an employment relationship.

However, the Court made clear that where the factual circumstances demonstrate:

•   Subordination to hospital management;

•   Fixed working hours; and

•   Characteristics typical of employment,

the income must be classified under Section 40 (1).

Revenue Department Rulings : administrative perspective

The Revenue Department has addressed similar scenarios through a number of rulings, which largely align with the Supreme Court’s approach, albeit with a stronger focus on operational control.

In these rulings, the Revenue Department has generally taken the position that:

•   Physicians receiving fixed monthly remuneration;

•   Working under assigned schedules; and

•   Operating subject to hospital direction

derive income under Section 40 (1), regardless of how the contractual relationship is described.

Conversely, the Revenue Department has accepted classification under Section 40 (6) where:

•   Remuneration is based on actual services performed (e.g., per patient or procedure);

•   Income varies depending on workload; and

•   The physician retains meaningful professional independence.

Particular weight is often given to whether the physician bears economic variability, which is viewed as indicative of independent professional activity.

Converging Principles

Taken together, the Supreme Court decisions and Revenue Department rulings establish a consistent principle:

The classification of a physician’s income depends on the true nature of the working relationship, not the contractual label or the professional title.

Importantly, while medicine is recognized as a liberal profession under Section 40 (6), this does not automatically determine the tax treatment in every case. The decisive factor remains the degree of independence versus control.

Practical Implications

For physicians, misclassification may result in reassessment, denial of deductions and potential penalties. Reliance on contractual wording alone is insufficient; actual working conditions must support the intended tax treatment.

For hospitals, engagement structures should be carefully reviewed. Arrangements involving:

•   Fixed or guaranteed payments;

•   Strict scheduling requirements; and

•   Integration into organizational hierarchies

may be vulnerable to recharacterization as employment relationships.

Hybrid models, common in practice, present the greatest risk, particularly where contractual independence is not reflected in day-to-day operations.

Key Takeaways

•   Substance prevails over form : Courts and the Revenue Department will look beyond contractual labels to the actual working relationship.

•   Professional status is not decisive : Although medicine is a liberal profession, not all physicians earn income under Section 40 (6).

•   Control is a key indicator : Fixed hours, supervision, and integration into hospital management point toward Section 40 (1).

•   Payment structure matters : Fixed remuneration suggests employment, while case-based or revenue-sharing arrangements support Section 40 (6).

•   Economic risk is relevant : Variable income linked to performance with indicative of independent professional activity.

•   Alignment is essential: Contracts, payment terms and actual practices must be consistent to withstand scrutiny.

Author: Panisa Suwanmatajarn, Managing Partner.

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Labor: The Case of Continuous Employment After Retirement – A Landmark Ruling on Severance Pay Continuity

In Thailand, it is a common practice for employees to reach the mandatory retirement age stipulated in company regulations, receive severance compensation as required by law, and then be rehired by the same employer under a new employment contract. This approach treats the post-retirement period as entirely separate employment, effectively resetting the length of service for future severance calculations. However, a recent Supreme Court decision has clarified that this outcome is not automatic and depends on the specific circumstances, intentions, and conduct of the parties involved.

Background of the Case:

The dispute originated from an employee who began working in 2010 in the position of financial controller. According to the company’s employee handbook, the retirement age was set at 55 years, which the employee reached in 2017. Rather than terminating the employment and paying severance at that time, both the employer and the employee mutually agreed to continue the working relationship without any severance payment being made upon reaching retirement age. The employee continued performing the same duties and receiving regular wages as before.

This arrangement persisted until 2020, when the employer decided to terminate the employment, citing retirement age as the reason, and paid severance based on the continuous service period from 2010 to 2020. The employee contested this, arguing that the original contract had ended upon reaching age 55 in 2017, constituting a termination that should have triggered severance pay at that point. Consequently, the post-2017 employment should be regarded as a new contract, entitling the employee to a second severance payment (a “double” compensation claim) upon the 2020 termination.

The case progressed through the courts. The Appellate Court for Specialized Cases sided with the employee, viewing the continuation as a new contract and requiring additional severance for the post-retirement period. The employer appealed to the Supreme Court.

Applicable Law:

The primary legal framework is the Labor Protection Act B.E. 2541 (1998), as amended, particularly Section 118, which mandates severance pay upon termination by the employer (absent exceptions), with the amount scaled according to length of service (e.g., 30 days’ wages for 120 days to less than 1 year, up to 400 days for 20 years or more).

Section 118/1 specifically addresses retirement: Retirement at an age agreed upon by the parties or stipulated by the employer is deemed a termination under Section 118, paragraph 2, obligating severance payment unless otherwise provided. If no retirement age is set or it exceeds 60 years, employees aged 60 or older may elect to retire by notifying the employer, with 30 days’ notice, and receive severance.

The key interpretive issue concerns whether reaching the retirement age automatically terminates the contract or if continuation without severance payment indicates an extension of the original contract.

The Supreme Court’s Decision:

In Supreme Court Judgment No. 3114/2567, the Court overturned the Appellate Court’s ruling. It held that the employment contract did not terminate in 2017. The decisive factors included:

•  The employee handbook explicitly permitted the company to extend the retirement age on a case-by-case basis.

•  No severance was paid at age 55, and the employee continued working seamlessly with regular wages and duties.

•  The parties’ conduct demonstrated an intention to extend the existing contract rather than conclude the original one and commence a new one.

The court emphasized that termination due to retirement under Section 118/1 occurs only when the employer ceases to allow continued work and does not pay wages. Absent such actions—particularly where no severance is paid at the retirement point—the contractual relationship persists as a continuous extension.

Consequently, the length of service must be calculated as a single, unbroken period from the initial start date (2010) to the actual termination date (2020). The employer was not required to pay “double” severance; the single payment made in 2020, based on the full continuous service, satisfied the legal obligation.

Key Takeaways:

This ruling establishes an important precedent emphasizing the significance of parties’ intentions and actual conduct over formalistic interpretations:

•  For employers and HR professionals: Clearly stipulate provisions for extending retirement age in employee handbooks or regulations. To reset service length post-retirement, pay full severance at the retirement point and execute a distinct new contract with explicit terms indicating a fresh employment relationship.

•  For employees: Continuous service without severance at retirement can benefit long-term accumulation toward higher severance tiers (up to 400 days’ wages), though it defers immediate payout. Employees should review company policies and seek clarification on contract status upon reaching retirement age.

•  Overall: Judicial decisions in labor cases prioritize the substance of the relationship—evidenced by ongoing work, wages, and absence of severance—over mere labels, ensuring fairness while aligning with statutory protections.

This decision promotes clarity in employment practices and reduces disputes by underscoring the need for transparent agreements regarding retirement and continuation.

Author: Panisa Suwanmatajarn, Managing Partner.

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